If you run a pub or other establishment which contains gaming machines, you should have already registered to pay machine games duty (MGD), which replaced the amusement machine licence duty (AMLD) from 1 February 2013.

MGD duty is charged at 5% or 20% on the machine’s net takings, but VAT is not also due on those takings. The lower rate is due where the maximum stake for the machine is 10p and the cash prize is £8 or less.

Once registered you have to pay the MGD over to HMRC every quarter, within 30 days of the end of the quarter. The quarters you have to report for are shown on the back of your MGD registration document. The first MGD quarter for most existing businesses ran from 1 February to 30 April 2013, with the MGD return and payment due by 30 May 2013.

However, many small businesses had difficulties with the MGD online reporting system. Therefore the business may not have submitted the first MGD return and payment on time. In a rare display of compassion the Taxman has decided not to collect any penalties due for the late submission of the first MGD return.

The Taxman has also admitted that there have been technical problems at his end of the MGD online reporting system. Some valid MGD returns have been rejected leading to a tax demand for unpaid MGD being sent out. If you have paid the MGD due, ignore any demand you have received for the same quarter.

If you are struggling with your MGD return or registration, ask us to help.